Contractor Markup Calculator

How Contractors Should Price Their Work

One of the most common and expensive mistakes contractors make: confusing markup with margin. A contractor who wants to make 25% on a job but adds 25% to their cost will actually only make a 20% margin — leaving real money on the table on every single job.

Markup vs. Margin — The Formula

Margin is calculated on the selling price: Profit ÷ Revenue. If you want 25% margin, divide your cost by 0.75 (1 minus 0.25).

Markup is calculated on cost: Profit ÷ Cost. If you add 33% to your cost, you get approximately 25% margin.

To achieve a 25% margin, you need a 33.3% markup. To achieve a 30% margin, you need a 42.9% markup. This calculator does the math automatically — just enter your cost and what you want to make.

What Markup Should Contractors Use?

There's no universal answer — it depends on your overhead, competition, and market. But as a general guide: most successful contractors target 20–30% margin (which means 25–43% markup on cost). New contractors often underprice because they don't account for overhead in their cost base.

A better approach: use historical job profit data to calculate what margin you've actually achieved — then adjust your markup formula to hit your targets consistently.